On Regulatory Reform, It's Now Warren vs. Sunstein

by James Goodwin

Several weeks ago, Sen. Elizabeth Warren delivered perhaps the most important speech on the U.S. regulatory system in recent memory at a forum on regulatory capture organized by the Administrative Conference of the United States. In it, she described how the regulatory system was not working for the people as it should be – or as Congress had intended. Instead, she described how corporate influence over the regulatory process has become so far-reaching and so overwhelming that it has become fundamentally "tilted" to generate results that favor corporate profit at the expense of crucial safeguards necessary for protecting people and the environment.

Put differently, Warren's speech described how corporate interests had gone beyond capturing discrete agencies – a phenomenon that policymakers and political scientists have recognized for decades – and now have successfully captured critical components of the process by which agencies do their work.

This new approach to regulatory capture produces the same results as the traditional conception: substantive policies that advance industry interests at the expense of the public interest. In contrast, though, it is much more insidious – indeed, process capture is nearly impossible for policymakers to observe, let alone for the general public – and it is much more difficult to effectively remedy through policy reforms.

CPR and others in the public interest community have been working for years to shine a light on this understanding of the regulatory system and draw the attention of policymakers, the media, and the public. In fact, CPR Vice President Sid Shapirospoke at the same event as Warren and raised similar concerns about regulatory process capture.

Warren's speech was significant because it represents the most high-profile articulation to date of the progressive diagnosis of what ails the regulatory system and the necessary reform remedies. Critically, the progressive vision of the U.S. regulatory system that Warren articulated stands in stark contrast to the narrative that has been peddled by most members of Congress in recent years and regurgitated throughout the media – a narrative that has generally framed the debate as whether or not we have too much regulation. Instead, Warren's speech makes the convincing case that our regulatory system is falling well short of what it should be accomplishing and that the proper reforms should be aimed at strengthening it.

Further underscoring the significance of Warren's speech is a column published yesterday by Cass Sunstein, who served as President Obama's first Administrator of the White House Office of Information and Regulatory Affairs (OIRA). As Warren noted in her speech, OIRA is as good a poster child as any for what is wrong with the regulatory system. This obscure and influential office offers a powerful conduit for corporate interests to block, delay, and dilute agency rulemakings that they find inconvenient to their bottom line. A 2011 report by CPR provides copious empirical evidence that corporate interests have successfully done just that, both under Republican and Democratic presidential administrations.

According to Sunstein, Warren's progressive critique of the regulatory system is off the mark. (Conspicuously, he does not take on the direct criticisms of OIRA that she raised in her speech, which included references to CPR's 2011 report and its findings.) Instead, he offers the same tired defense of weak and delayed regulations that conservative lawmakers and their corporate benefactors have put forward for years.

Sunstein implicitly argues that it is better to err on the side of industry profit maximization through needless delay and analysis rather than on the side of strong and timely public safeguards – even though this is exactly what laws like the Clean Air Act and the Federal Food, Drug, and Cosmetic Act call for. His default position, which he adopts without question or contemplation, is that the first job of the regulatory system is to protect industry's interests rather than the public interest. If that's not a loud validation from Sunstein that our regulatory system has become thoroughly captured by corporate interests, then I don't know what is.

To support his argument, Sunstein also makes the same empirical move that anti-regulatory forces always make: He points to the total number of regulations that have been issued under the Obama administration (particularly as compared to the George W. Bush administration). As a preliminary matter, having a stronger regulatory record than George W. Bush is hardly anything to hang your hat on. More to the point, pure, unvarnished numbers like these do not tell us anything about whether the regulatory system is accomplishing what it's supposed to be accomplishing when it comes to implementing the nation's laws.

Yes, the Obama administration has issued important rules addressing everything from food safety to climate change, but are they as protective as the law and the relevant science requires? More to the point, these numbers overlook the fact that we as a nation are no safer against such recognized risks as chemical storage facilities, such as the one that leveled the town of West, Texas, or lead-poisoned drinking water pipes, such as the ones afflicting communities like Flint, Michigan, than we were when President Obama was first sworn into office.

In short, Sunstein's numbers don't answer the fundamental question about the regulatory system: Is it doing enough? Indeed, the "burden on industry" frame that has for too long dominated the debate over the U.S. regulatory system is incapable of answering that critical question. Instead, we need to look at the risks that real people face and the legal tools and resources that are available to protector agencies like the EPA, the FDA, and OSHA to address them.

Warren's speech suggests a new path. The progressive vision for looking at the regulatory system that she describes is one that can empower policymakers and the public to meaningfully evaluate its performance and determine whether agencies are fulfilling their statutory mission of protecting people and the environment.

Hopefully, Warren has helped to herald a new era for how we as a country think about our regulatory system. With the impending presidential election raising fundamental questions about the role our government should play in a modern industrialized society, the timing couldn't be better. We at CPR look forward to continuing to do our part to promote this progressive reorientation of the debate over regulatory reform so that it might lead us some day to a regulatory system that holds public protection as its first priority.